What Happened?
Shares of genetic testing company Natera (NASDAQ: NTRA). fell 0.9% in the morning session after the company announced an unfavorable court ruling in its ongoing patent litigation with competitor NeoGenomics.
The U.S. District Court for the Middle District of North Carolina invalidated certain claims in two patents that Natera had asserted against NeoGenomics' v1.1 RaDaR test. This legal setback was seen as a victory for NeoGenomics, whose own stock surged on the news.
Natera stated that it is evaluating its options, which include a potential appeal. The company also clarified that the ruling does not impact a separate patent that was previously used to secure an injunction against an earlier version of the NeoGenomics product. Nevertheless, the invalidation of these patent claims represents a significant headwind in Natera's efforts to protect its intellectual property.
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What Is The Market Telling Us
Natera’s shares are quite volatile and have had 16 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The previous big move we wrote about was about 23 hours ago when the stock gained 3% on the news that the company announced its Signatera molecular residual disease test was selected for a Phase III clinical trial for muscle-invasive bladder cancer.
The trial, known as ARCHER, is sponsored by NRG Oncology and will evaluate whether shorter radiation therapy courses can achieve outcomes comparable to the current standard of care. The large-scale study is expected to enroll patients from over 100 sites across the United States and Canada. Natera's Signatera test, which is designed to detect residual cancer and recurrence, will serve as a pre-specified secondary endpoint in the trial. This inclusion follows other positive developments, including recent results from a separate Phase III trial that demonstrated Signatera's ability to predict immunotherapy benefits in bladder cancer patients after surgery, reinforcing the test's clinical utility.
Natera is up 4.3% since the beginning of the year, and at $167.57 per share, it is trading close to its 52-week high of $177 from February 2025. Investors who bought $1,000 worth of Natera’s shares 5 years ago would now be looking at an investment worth $2,630.
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